Incorporating Zero Responses in the Analysis of Cvm Valuations
22 Pages Posted: 26 Feb 1998
Date Written: April 1997
Abstract
The contingent valuation method estimates individuals' willingness to pay (WTP) for nonmarket environmental assets via preferences elicited by either open-ended or dichotomous choice questions. Traditional analysis of such data has tended to ignore zero WTP values, or treat then in a unsatisfactory manner. Recently, spike models, which explicitly allow for and incorporate zero responses have been suggested. The paper extends the spike model approach to allow for explanatory covariates, and shows how standard computer software can be used to carry out the computations. In addition, the paper develops estimates of mean or median willingness to pay as a function of these covariates.
JEL Classification: Q20, Q29
Suggested Citation: Suggested Citation
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